Cuba and the United States: Ties of Singular Intimacy

8. Twilight Years

8 TwilightYears The crisis of the 19305 gradually ended, and many of the conditions that had been at its source were remedied or otherwise adjusted . Relations between Cuba and the United States changed when in 1934 the Platt Amendment was abrogated. The United States retained use of the Guantanamo naval station but agreed to abolish the other clauses of the 1903 Permanent Treaty. Gradually Cuban sugar recovered a larger share of the North American market, although it would never again attain the prominence it enjoyed during the 19105 and 19205. By the terms of the Jones-Costigan Act (1934), the United States lowered protectionist tariffs on sugar imports. Cuba benefited from this measure, but only slightly. The Jones-Costigan Act substituted quotas for tariffs as the means to protect domestic sugar producers . By the terms of the law, the U.S. secretary of agriculture was empowered to determine national sugar needs, whereupon all sugarproducing regions, domestic and foreign, would receive an annual quota of the total. The assigned quota was based on the participation of sugar producers in the U.S. market for the years 1931-33. The selection of these three years was unfortunate for producers in Cuba, for it was precisely this period—the years of Smoot-Hawley—during which the Cuban share of the North American market was at its lowest. Nevertheless, Cuban participation in the U.S. market increased gradually through the 19308, from 25.4percent in 1933 to 31.4 percent in 1937. During these years, overall sugar production expanded, and the value of the expanded production increased. Between 1933 and 1938, Cuban sugar output rose from 1.9 million tons to 2.9 million tons, with the corresponding value increasing from $53.7 million to $120.2 million. Also during these years the United States attempted to recover control over the Cuban economy. The U.S. hold over Cuba had slipped. 202 203 Twilight Years In the decade between 1923and 1933, Cuban imports from the United States had declined from $191 million to $22 million and Cuban exports to the United States had decreased from $362 million to $57 million. United States participation in Cuban import trade diminished from 74.3 percent during World War I, to 66.7 in 1922, to 57.4 percent by 1931. Cuba dropped from sixth to sixteenth place as a customer for United States exports. The Department of Agriculture estimated that the loss of Cuban markets for foodstuffs alone meant the withdrawal of some 817,267 acres from agricultural production in the United States. Exports to Cuba of raw materials and manufactured products other than foodstuffs declined from $133 million in 1924 to $18 million in 1933.] Certainly the collapse of the Cuban economy after 1929 contributed to the loosening of commercial ties between Cuba and the United States. But other factors were at work as well. The Customs Tariff Law of 1927 and the subsequent impetus given to the diversification of the economy served to stimulate Cuban self-sufficiency. Becauseof increased local production, commodity imports formerly supplied by foreign producers, including eggs, butter, and lard, ended altogether or, as in the case of shoes, furniture, and hosiery, diminished markedly . The decline ofNorth American participationin the Cuban import trade also resulted from increased foreign competition. The Depression and the drop of Cuban purchasing power combined to make the island a price market and opened the door to the importation of cheap commodities from Europe and Japan previously supplied by the United States on a quality basis. Mounting tariffs and increased taxes also helped make U.S. imports uncompetitive. Sumner Welles had two missions when he arrived in Cuba in the spring of 1933— one political, the other economic. "First," he recalled later, "to assist the Cuban people themselves to solve the political crisis which had developed and, second, to provide, by cooperation between our two Governments, a means for the rehabilitation of Cuba's national economy , and thereby likewise to reestablish, to the advantage of American agriculture and industry, the market which our own exports had previously enjoyed."2 2O4 CUBA AND THE UNITED STATES North American plans had been thwarted momentarily by the Grau San Martin government, but with the return to power of pro-U.S. political groups, discussions on a new trade agreement resumed. Under the Mendieta government, the United States negotiated a new reciprocal trade agreement with Cuba. Bythe terms of the...